A “status quo bias” slows the U.S. Federal Aviation Administration in its effort to modernize the nation’s ATC system, according to a new report. It recommends separating the FAA from its air traffic organization (ATO) and shifting ATC funding from its dependence on aviation user taxes to direct charges customers would pay to an independent ATO.

The Hudson Institute, which describes itself as a nonpartisan independent policy research organization, released the report, “Organization and Innovation in Air Traffic Control,” on January 6. Robert Poole, director of transportation policy with the libertarian Reason Foundation, is the author. The report’s conclusion that “organizational reform” of the FAA is key to achieving ATC system modernization adds to mounting pressure inside and outside of Congress to restructure the U.S. aviation system along lines similar to what Canada, the UK and other countries have done.

The report identifies “institutional factors” affecting the FAA’s performance based on “three decades of critical reports” by government watchdog agencies and case studies of several “critical” components of the NextGen ATC modernization effort. These include digital communications between pilots and controllers, performance-based navigation, real-time aviation weather data and ATC facilities consolidation.

The FAA’s status as ATC service provider and aviation safety regulator has created an “over cautious culture” at the agency, the report says. It has experienced a “brain drain, losing the best and brightest engineers” to the higher-paying private sector. Similarly, it has lost program management expertise, “making it overly reliant on contractors it has difficulty controlling.” The agency’s long history of problems has attracted oversight from the Government Accountability Office (GAO), the Department of Transportation (DOT), the White House Office of Management and Budget and congressional committees, diverting management attention.

“Some ATC providers in other countries have embraced new technologies and procedures much more readily than the FAA, including providers in Australia, New Zealand, Canada, Germany and the UK, all of which were formerly part of government aviation agencies,” the report states. “Over the past 25 years, all of them have been reorganized as self-supporting corporate entities, charging aviation customers directly for their ATC services and issuing bonds backed by their revenue streams.”

Momentum is building to reorganize the FAA. In a speech to the International Aviation Club of Washington, D.C., on December 11, Rep. Bill Shuster (R-Pa.), chairman of the House Transportation and Infrastructure Committee, called for “bold ideas” to improve the U.S. aviation system. “[W]hat can we learn from Canada’s air navigation service provider? Nav Canada is privately owned and operated…Nav Canada has been able to quickly and nimbly modernize and realign its air traffic control system,” he said, according to a text of the speech. “We can’t afford to just stay with the status quo, simply because that’s the way it’s been done until now,” Shuster added. “Has the status quo been the most effective route for NextGen? Is the FAA properly organized to carry out this critical, but costly and chronically delayed modernization effort?”

The FAA Management Advisory Council has agreed on “four interrelated principles” to reform the agency, one of which is to “separate a new commercialized ATO from the FAA,” modeled after air navigation service providers such as Nav Canada, according to a column by Stephen Van Beek, who recently served on the advisory board.

In the January issue of his newsletter “ATC Reform News,” Poole notes that the DOT inspector general and the GAO are studying ATC organizational and funding reform. The Eno Center for Transportation, a nonpartisan transportation think tank, has created a NextGen Working Group to assess barriers to ATC modernization. “In addition, it is something of an open secret in Washington that the Business Roundtable has a project on ATC reform,” Poole wrote.